Q2 2023 TDCX Inc Earnings Call
Ladies and gentlemen, welcome to the TD six Q.
Q2, 2023 results announcement my name is Andrea and I will be called in Nanjing, We'll call. Today. If you would you like to ask questions. During the presentation. You may do so by pressing star one on the telephone keypad.
I'll hand, you over to the management team to begin.
Yeah.
Hello, everyone and welcome to <unk> second quarter earnings Conference call. My name is Jason Lee head of Investor Relations joining.
Joining us on our call today is our executive chairman founder and CEO , Mr. <unk> <unk>, our CFO , Mr Chin ballooning and our EVP of corporate development Mr. Edward go.
Before we continue I would like to remind you that we will make forward looking statements, which are subject to risks and uncertainties and may not be realized in the future you should not put any reliance on any forward looking statements.
This call includes the discussion of certain non.
<unk> financial measures, such as I, just didnt EBITDA and constant currency revenue growth.
A reconciliation to the closest <unk> measures. Please refer to the form 6K, which is available on our website.
We have prepared a convenience translation thing about dollar to the U S. Dollar at a rate of one USD 21357, and Singapore dollars.
This should not be construed as representation that anything up with all of them all can be converted to USD at this or any other REIT.
Let me hand over the call to the whole the whole piece.
Hello, everyone and thank you for joining us today.
We delivered a strong and resilient set of results against the backdrop of a challenging environment.
I appreciate that everyone that TD jakes is putting the extra mile to achieve this and I would like to thank our global team for their efforts, let me begin with some highlights Q.
Q2, 2023 revenue rose five 5% year on year.
On a constant currency basis revenue would have grown even stronger 11, 3%.
<unk> significantly exceeded our guidance.
Our largest segments Omnichannel CX.
<unk> grew at a nice clip of 8% year on year.
Oh traditional strength in sales in digital marketing also came through as the segment grew 15%.
We continue to deliver industry leading margins.
The EBITDA margin of 25, 9% for Q2 2023 margins were down compared to last year as we continue to put in the necessary investments to position ourselves stronger for a tech sector recovery.
This includes initiatives such as our geographic expansion.
Moving out of our <unk> AI.
And operationally keeping strong agent support ratios or our clients.
Our CFO , Mr Chin, who will provide more details on our margins later.
Operationally I'm very proud that we remain at the top end of performance tables for our clients and as a result.
We need to grow a business broadly across our clients revenue from clients outside the top 567% year on year, if not for the impact of one of our key clients reducing volumes as part of their focus on cost efficiency. We would have we just are much stronger overall revenue growth.
Our strategic geographic expansion over the last two years has really started to contribute meaningfully.
All in revenue from all new geographies was nine times in Q2 2023 compared to what it was in Q2 2022 this.
Clients that we added from our Hong Kong subsidiary as well.
Overall, we delivered a robust earnings performance that profit for the period Rose nine 4%.
22 million U S dollars, we stand out amongst peers in our sector and still being able to deliver good earnings growth over a very tough period.
This clearly demonstrates that <unk> continues to execute a very exceptional levels.
Our profit performance has translated into strong cash flows and strong balance sheet.
Cash generated from operations was $49 million for the first half of 2023.
Such a June 2023, we have 301.
Media in U S dollars cash and cash equivalents with no debt on the balance sheet.
This puts us in a very strong position to move quickly on several strategic growth options, especially in an environment of high interest rates.
We continue to explore M&A opportunities that could help enhance our capabilities all reach to better serve our clients all to accelerate our growth.
Besides that we have the financial strength and flexibility.
Capital for important organic initiatives, such as <unk> AI.
Our consulting capabilities and investing in a new geographic sides I'm very happy with the progress of the T. Six yeah. He is making and we're growing our team.
Lee.
The amtrust.
Entrusted us on consulting and advisory services.
In piloting and implementing AI enabled CX solutions.
A number of projects are in the pipeline for example, with a large state clients our team and more stuff to analyze the cognitive load of multi skilled agents and two identified the dipping point at which an individual agent would be overwhelmed by product information and which.
Would impact the weird customer service campaign would be setup.
Another example, we've done for our clients.
Modeling and analyzing agents learning curves and thereafter, you're bluffing.
<unk> customized roadmaps such that agents reached peak performance faster.
For a travel and hospitality clients, we incorporated machine learning to anticipate and decreased employee attrition.
Up to 15%.
We are also leveraging Google cloud enterprise grade generating AI capabilities.
To build an AI enabled chatbot to respond to candidates queries about our company and the recruitment process.
Integrating this with our proprietary flashed higher recruitment system.
To sum up there are huge businesses as well as productivity improvement opportunities.
Yeah, I and we're moving at incredible pace to take advantage of these.
<unk> is very differentiated well a job nimble and hyper focused on the complex segment, which requires human intervention and that is not easily replaceable.
Our positioning and strength in southeast Asia are unique.
Global CX providers.
I'm not sure if the public markets have misunderstood or overreacted to the threat of journey II.
All underestimating the efficiencies and opportunities that this could bring.
Current trading levels, and considering the profitability and cash generation of our differentiated business, we see great value and we intend to prioritize share buybacks as a form of enhancing shareholders' returns.
Next let me touch on some highlights.
Our business development momentum remains very strong.
Count Rose, 52% to 91 clients as of June 30.
2023, and we have a further seven clients, who have been signed up but not yet launched.
Beyond the quantity I am excited about the quality of clients that we launched in Q2.
Which included several giants of the world in their respective spaces. This includes establish global E Commerce platform based out of the U S.
A rapidly growing fast fashion E Commerce platform, which is one of the two fastest growing giants globally.
A leading treble platform based out of Asia, which is one of the worlds largest in this space.
With a higher client Calvin broader growth, we improved our revenue diversification as our top five clients contributed 73% of this quarter's revenue.
<unk> from 83% in the same period last year.
In terms of geographic reach we now have a much wider footprint compared to two years ago with.
With a growing head count of over 18700 employees globally, we are able to serve more clients across the world.
The revenue chart here demonstrates our unique positioning amongst global CX provide us with around 71% of our business focus on serving southeast Asian, and North Asian languages.
Before I hand over to our CFO , let me share some views on the outlook.
<unk> completed all of the year now we have a better sense of where we will land.
Why 2023, we've seen delays in decision, making from funds and the lengthening of the sales cycle throughout the first six months.
The effect that flows through to the second half, which means that the higher end that we were aiming for in.
Second half 'twenty to 'twenty three is not coming through.
Such we are adjusting our FY 2023 revenue outlook to reflect this Mr. Chen will provide more details later.
While we do not want to get too much ahead of ourselves we are starting to get the slightly clearer picture.
Of how the next year is going to unfold.
There are encouraging signs.
Our economy activity in the U S. Coupled with recent positive results for several of the Tech Giants include.
Including those in the digital advertising space.
This bodes well and I'm cautiously optimistic that we're starting to see some green shoots for 2020 for rebound.
With our efforts on operational excellence and focus on value, adding to our clients.
Very strong position to seize opportunities as they arise with that let me hand over to Mr. Chin.
Thank you Aloha.
In Q2, 'twenty three we delivered revenue of USD $126 2 million up five 5% year on year on a reported basis.
The Singapore dollar remained constant against our operating subsidiaries currencies from Q2 'twenty two.
You would have risen by 11, 3%.
The exchange rate used for translation of the local functional currencies of the Malaysian ringgit, Philippine peso, Hy Bon Jetblue and renminbi depreciate it between 3% to 9% against the group's presentation courtesy of Singapore dollar.
Q2, 2023 compared to Q2 two.
Moving onto profitability measures EBITDA decreased by two 2% to USD $33 7 million this quarter.
Me too higher employee benefit expenses, which rose seven 1% year on year.
Higher than the revenue growth rate.
Adjusted EBITDA declined seven 1% to U S dollar $32 7 million in Q2 thousand 23.
Margins contracted from 29, 4% to 25, 9% on higher infrastructure and employee costs.
I will elaborate more on this in a later slide.
Interest income increased six times with increased client interest earning deposits.
The high interest rate environment, while income tax expenses declined 12% with the reinstatement of tax incentives in the Philippines that was suspended in Q2 last year.
Consequently profit for the period grew nine 4% to use the total $1 6 million.
Adjusted net income, which represents profit before equity share based payment expense.
Foreign exchange gain or loss and acquisition related professional fees were stable year on year.
This was largely because we incurred lower equities that the share based payment expense in Q2 2023 compared to the same quarter last year.
Let me next provide some insights of our revenue by service offerings.
Our growth in Q2 was led by the sales and digital marketing and a line of business.
Total by Omnichannel CX services.
It's partly offset by a decline in content Trust and safety.
Revenue from sales and digital marketing services increased by 15% to U S. Dollar 33 million driven by the expansion of existing campus by digital advertising and media.
E Commerce clients.
Our newer client cohorts from 'twenty two to continue to scale up further contributing to the growth in this line of business.
Omnichannel CX revenue rose, 6% to USD $76 million as a result of higher business volumes driven by the expansion of existing campaigns by clients in the travel and hospitality gaming as LTE.
<unk> services.
It goes.
Revenues from content Trust and safety declined 19% year on year to USD 60 million due to contraction of volume requirements by existing clients in the digital advertising and media vertical.
Partially offset by expansion in the travel and hospitality vertical.
In summary, Omnichannel CX made up 60% of our total business in Q2, while sales in digital marketing and content trusted colleague.
I'll leave it at 26% and 13% respectively.
Let me elaborate on the adjusted EBITDA margin movement from 29, 4% in Q2 2022.
225, 9% in Q2 'twenty three.
In terms of margin impact higher rental and maintenance telecoms and tech expenses were offset by lower equipment costs, leading to a neutral impact.
There was a 0.8% impact from general ways, largely high infrastructure costs linked to FX based expansion for new sites and higher professional fees, such as tax and legal fees.
Certainly there is a two 7% impact from higher employee costs.
Of which the bigger factor is higher local support and service head count.
There is also some impact from higher he kind of deploy agents versus billable.
As higher corporate costs.
However, when comparing to Q1 2023, there was a sequential improvement of margins from 24, 2% to 25, 9%.
This was due to an improvement in utilization in both.
Mature sites, and new sites, like Brazil, Turkey, and Korea as well.
An improvement of excess headcount compared to Q1, two and three this results in Q2 2000 phase III closer towards the blockage in the account and man hours.
Let me move on to the half year performance.
Our revenue for the six months ended June 22000 feet was USD $247 9 million up six 8% on a reported basis.
Our up 11, 8% in constant currency.
EBITDA was up 2% to USD $65 million and profit for the period increased by 15, 4% to let's call it $41 7 million.
This was driven by a reversal of equity separately share based payment in Q1 2020 dream.
Hum.
Income tax expenses.
Excluding the effects of the reversal of the share based payment expense adjusted EBITDA declined 11, 6% to USD 62 million, while adjusted net income declined nine 9% to U S dollar $38 9 million.
This was largely a result increased employee costs and high all hits in particular for the first quarter of 2023.
Accordingly, adjusted EBITDA margins fall first half 2023 landed at 25% down from 33%.
First half of 2022.
To a large extent much of the margin compression is due to planned costs such as our geographic expansion.
Using to recruiting good time, and keeping strong support and shelf stock ratios.
For first half 2023 revenue from Omnichannel, CX rose, 8% to USD $148 million.
Revenue from sales and digital marketing services increased by 19% to USD 66 million, while revenue from content Trust and safety services was about 15%.
30 to Louisville.
For the half year, Omnichannel CX contributed 60% of our business.
While sales on digital marketing stood at 27% and contentious or 50 at 13%.
Lastly, let.
Let me provide an update on our full year 'twenty outlook.
We have revised the full year 2023 revenue growth reached two 2% to 4% on a constant currency basis from 3% to 8% previously.
So the Han mentioned some clients are taking.
Longer to commit to business volumes.
During Q2, one of our key funds also reduce their volume forecast for the remaining months of FY2023.
This means that there is a knock on effect on the revenue numbers that we can put into our forecast of second half of 2020.
Further revenue was strong in the second half of 2022, which sets a high bar in terms of percentage growth for the second half often treat.
In terms of adjusted EBITDA margin to the top end of our range.
And our guidance for full year 2023 is not expected to be approximately 25% to 7%.
We are committed to putting in the necessary investments in the business for the long term I remain cautious in our cost optimization efforts with an eye on volume recovery for 2024.
Yeah, just at the margin outlook accordingly to reflect this.
Against the backdrop of what we are expecting a re strategizing our overhead costs to look at more elastic against revenue.
For example, this Lucas.
Infrastructure spending closer to revenue pipeline.
These initiatives will take some time to benefit margins likely in full year 'twenty four.
With that let me hand, you back to the heart.
Okay.
Thank you Mr. Chen.
We're ready to take questions hi, everyone.
Yeah.
Ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your telephone keypad.
Right now have our first question from Palm Beach from Goldman Sachs.
Yeah.
Hey, good morning, everyone and thank you very much.
Yeah.
Three questions for me please.
Number one on the guidance and the outlook can you. Please go over the rationale why you make those types of cancers.
And to your revenue guidance, especially when looking at your first half of the year.
On a constant currency basis.
Uh huh.
So what that change I'm sure you're talking about some of your clients, but can you go into specific details of that on the back of that as well what level of confidence and visibility you have on this guidance.
Any possibility of fun lifestyle going forward. That's question number one number two you also mentioned that you started seeing tie up a better 'twenty 'twenty four.
To further clarify and provide more color on that.
Any of your clients started indicating that they would likely increase that spending into next year.
And number three lastly can you share with us more about how AI may impact your business, how many percent of the FEMA impact comparatively at how do you plan to admit that last year.
Alright, Thank you Paul.
For all these questions. So yes, the revised guidance.
From three to 822 for <unk>.
Cold, it's substantial as not tremendously substantial but it does have an impact I do agree.
So theres a few reasons behind this the first one is.
The deals we are hoping to close the deal.
So really the velocity of deals have been slower than anticipated some clients who had indicated.
Indicated the second half was going to be stronger.
It was not really.
Didn't really materialize, you've got delayed even further.
Lets say into September .
Lower volumes than initially anticipated.
We still have so that's one factor.
Still have pressure from the digital advertising sector.
Which was.
Not doing terribly well in the first half, but it's not going to do better in the second half.
And that's taking into account as well that our second half last year. It was also part of it.
Good second half.
That doesn't help us very.
Very much and then.
Yes.
Opportunities are coming though.
And we're a bit more optimistic around 2024, leading into your next question.
See where we're at.
Starting to indicate a better forecast in 2024.
Nonetheless, I think if I, if I come back again on the the impact on the second half which was the primary question you have.
The travel and hospitality is not really going to show up as much as we were anticipating.
China is in really played out so well.
As we were hoping it would.
It's a whole bunch of factors.
Although we are sectors that are doing pretty well like gaming.
E Commerce automotive for us are really doing extremely well and there's a whole part of the business, that's drawing a fast space, but it's being brought down but other sectors that all weighed in now if you look at digital advertising.
We see.
Some good results announced by Oh key clients generally in the first two quarters. Unfortunately, we don't see it translated in immediate growth. So how long more do they need to produce better results until they decided to.
Open the flood gates and decided to invest further and as a question Mark that we still have on our list.
No.
Having said that we see some green shoots in 2024.
We see that the recession fears all starting to subside and we are seeing some also good momentum on our pipeline.
We're closing deals.
The leads we're getting.
Starting in the second quarter are starting to turnaround compared to the first quarter and so theres a number of encouraging signs.
That makes us.
Pretty.
Optimistic if not cautiously optimistic for 2020 for now the last question you have.
One of your the question I think you have is whether there is a chance that we're going to revise our forecast again in the next announcement for Q3, we think we have a good sense of 2023 at this point, so any barring any unforeseen circumstances or something really made.
Uh huh.
We are pretty locked in that guidance at this point.
The question on impact of AI, we've had very very good momentum with TD shakes AI.
I have to say and a lot has to do with the.
The enroll we think <unk> can play.
As an advisor to our clients.
And so we've had a lot of very successful discussions with most of our clients and the successful engagements in consulting.
Consulting projects with them some that we I think explained earlier in the call.
And really it's.
Leveraging the possibilities that are available to us in terms of impact the first impact we expect from TD CX AI is strengthening our relationship.
Defending our territory and really enhancing the business, we already have with our clients to grow further show them better productivity better insights better quality.
And what's interesting I would say in Q2, as we didnt anticipate to monetize Gtx AI. So so quickly we expected it for a few years to remain.
Value add.
To our clients.
Do what I just said.
We're starting to make commercial proposals as well.
Dollars associated with it so there's a real appetite from clients.
But we see real opportunities as a result of that.
And one of the.
Opportunities, we see as a growing.
The total addressable market for <unk>.
We see the possibility now to offer some of our services to the in house.
Call centers in operation.
And Thats, a total addressable market of three times the size of the outsourced CX market.
So all total addressable market has grown three fold on the basis of that a full full because from a $100 billion removing into plus $315 million 415 billion, but there is also the consulting.
Mark at a time in the CX industry, which is another $30 billion. So we're talking about for $445 billion as opposed to a $100 billion. So this is a huge opportunity for us to to play in an <unk> with its a very differentiated offering.
Being in Asia, working with the best clients in the World.
Got so much knowledge and capabilities that we can share.
As part of TD CX AI for this total addressable market.
That gives us good confidence level as to the opportunities for us to tap this new trends that we hear a lot about.
I hope that answered your questions.
Thank you.
Our next question is from D.
Oh, Cts and B.
Okay.
Hello, Hi, Thank you so much for that.
So the presentation I just have a few questions here.
First the revenue contribution outside of your top five clients seem to have bumped up really well in Q2. So could you. Please share a bit more color. On this are you seeing clients that are on boarded over the past year or two ramping up their campaign scales more significantly but are there any other standouts.
Is that in moving the needle yet.
And my next question would be on the EBITDA margin guidance, so should considering the lower adjusted EBITDA margin should we expect this trend to be more cyclical in nature, given the lower volume outlook and second half or is this more structural looking at the types of services that you're providing to sum up to New York.
Clients. Thank you.
Thank you very much for the questions yes.
The performance outside of our top five clients is quite stable.
A staggering and significant.
Very happy with that that's the whole goal of the company, where we you know we have two strategies to diversify from our bigger clients, which is build.
Build out.
New newer clients to outpace the growth of our bigger clients. Then the second one is on the M&A side continue to either a more balanced.
Business. So we've had great success, bringing new clients.
For the past few years some of them date back to 2021, and they started rather small but.
I have taken over the world. So we have a gaming client for example, where we really started in one location back in 2021 and now we are in five locations.
It's become a global client that's been growing very fast.
The gaming sector.
On boarded on the back of this another.
Great gaming our clients as well.
Where should we expect.
Now operating in two locations, we expect it to grow another location.
Doing well.
We on boarded as well recently.
A fast moving fashion.
From Asia, and this causes growing super fast, but really extremely fast so it's.
Star for Us in one of our locations in the Philippines, we have digital advertising.
We on boarded about two years ago, that's starting to really a delay.
Deliver.
We just recently on boarded less than a year ago and ultimately for our business and you know automotive is going through a bit of the revolution of <unk>.
A change of distribution model transitioning from.
Wholesale and and agents and distributors into an online model that creates tremendous opportunities for us it's a global deal.
So there are quite a few opex.
Opportunities, but what I find super interesting as well.
A lot of more and more of our clients are becoming originally from Asia.
Big trend.
Whereas <unk> is able to track.
The Asian Superstars.
<unk>, the leading companies of Asia as part of our clientele, which really.
Representing the future of the economy for for Asia and for the World actually because they are not operating in in Asia will need if they've done their job of having a good market share in this growing territory and they're taking over the world and we're there.
To support them.
Yes.
Now we have 16 locations to serve our clients. So we've been making great progress on the <unk>.
Our location so we're in a fantastic position.
In a good place at this at this point.
Maybe.
Second question I think is around the.
The margins.
And.
Both maybe the short term and the long term part of the margin maybe I'll defer to Mr Chin too.
Talked to view about the margin if you don't mind, yeah sure. Thanks al.
So on the margin side of things.
It is purely due to largely plan.
Costs and planned investments and our continuing investment into the business.
As a reflection of our geographic expansion that we have.
In the last couple of years.
The building up of our AI.
Larnax alluded a bit a while ago that goes back.
Back into the EBITDA.
Outlook.
I know what happened in Q1.
Our improvement going into Q2 about keeping our agents sizing anti.
The anticipation of the volume movement.
That comes along with support and <unk>.
Staff ratios to deliver the best optimal outcome for our clients.
And it is kind of reflected in Q2 that we are going to continue on that path.
Going into the remaining.
Months of the year.
In that sense Avi thing that these investments.
But.
Necessary to.
To put us in a healthy position to benefit from a.
Possible macro recovery.
If it turns in towards end of this year going into 'twenty.
2024.
So let.
Let me say, we do commit ourselves to putting in FY <unk>.
On necessary investment.
Alright, and spending for the business in the long term rather than wait.
On a quarter to quarter basis.
Remaining.
Careful in how we optimize our costs.
Yes.
No volume rebound in 'twenty four but at the same time against what's happening in the near term.
Also re prioritizing our weights.
January .
From what we had planned on.
To make it more.
They kind of elastic against our revenue volume that in the near term.
Our EBITDA based on cost.
Hum.
Things like infrastructure.
Cassidy planning decisions.
Q2 be revisit that to ensure that we do in stage two of costs from the business side of things. So that's.
That's what it is.
It's happening now and also going into the remaining.
Yes.
Yeah.
Thanks.
<unk>.
We have some questions on the webcast that I can read up.
Number one.
Yes, a bit more color on your business development pipeline.
How is it coming along.
And one would be you announced.
Now some share buybacks in Q2, the entry can you give more color around that and your plans going forward.
Yeah.
Thank you for the question so.
Our pipeline is building.
Building up pretty nicely.
What I liked about it as well this year as we've.
Gotten quite a bit of interest in a new sector that we hadn't been really into which is health tech. So we want to two contracts in that sector in Europe .
We have and then a third one in Asia as well and we have more coming up on the.
Health sector, as well, which is going to be an interesting new.
Government for <unk> to grow.
Opportunities for business, we see in Q3, the number of leads.
I'm starting to.
Getting into the zone of the higher numbers than we've had before over.
Over the past two quarters.
<unk>.
Good opportunities in a still a lot of new economy com.
Company.
As well.
For us and as well I would say that what makes this year different.
We're getting a lot more rfps from existing clients.
And.
The deals we're closing as well as a much higher.
Sales value than they did in the previous quarter.
So our business development team that was recently restructured is.
Doing a great job and that can only get better.
So that's the answers.
And so as the questions on the pipeline.
The other question to be answered by Edward go head of corporate development.
On the topic of buybacks I think we've always said we are guided by.
Valuation against our peers.
On the impact of liquidity, but I think our current levels.
Definitely we are seeing.
Attractive values, I think sort of prioritizing the use of our capital.
On this exercise.
I think looking at just sort of our cash being 300 million steel that's about 40% of our current market cap.
It looks like a very sort of adequate level for us to continue to be more proactive.
And our share buyback program so.
Currently we have done some.
In the second quarter.
'twenty three.
Which were the case.
It's about 160000 lbs over this period of time, so we'll continue to sort of adopt the same.
<unk> going forward. Thank you and if I can rattle off a little bit on the business development pipeline as well just wanting to indicate that a little bit of what we're seeing as potential trends that are going to impact us and drive more business for us.
Really the opportunity for outsourcing.
Which we think is going to fuel.
<unk> 2024.
We're starting to see that clients, who have laid off.
Need to get things done, but they don't have the manpower they don't have the capabilities.
Even in the in house market clients don't have the capabilities because everybody has been growing for the the leaner exercise.
The kind of.
Inquiries were getting from funds are becoming increasingly complex because.
All the resources that the cuts so the second trend that we see also is.
Is the ever rising expectations as to where it becomes more and more digital the expectations are much higher so some of our clients have increased their.
NPS expectations that she set expectations in this.
Increases come at a cost that can be mitigated through automation, but will require.
Much more investments in an effort and that's we think will be will.
We will be driving.
The price of the business and what we sell to our clients and leveraging absolutely Judy shifts AI to help to drive that.
So we see quite a number of positive trends at this point that.
That can continue to power the business in 2024 and beyond.
Yeah.
Yeah.
Okay.
Yeah.
Operator can we have the next question please.
Sure. Our next question is from Jonathan Ho.
Philippines Securities.
Yeah.
Good morning management, Thanks for taking my question.
Firstly could you give some update on the new geographies, Indonesia, and Brazil, how has that been.
It has the pipeline over there.
As expected.
And the second question would be on a key client.
Actually reduced volumes for you guys.
Do you think volumes.
He gave you a little bit more color on how much of how.
How much volume do they cut and how much expected growth.
Thank you.
Thank you.
Thank you Jonathan so.
<unk>, India, Indonesia are pretty new to us so it's a it's a at this point it's embryonic.
<unk>.
<unk> expansion, we are very early days in Indonesia, but successful already with the client because all our strategy for 2023 and 2024 will be to go in Greenfield operation supported by clients as previously different.
Where we were in some location strategically investing but for.
Several reason one that we already have quite a good footprint globally that we're trying to control our costs as well now we choose locations. When we have a business so Indonesia was exactly that.
So it's just starting but very successful at this point, Brazil is I would call. It the tremendous success, we started with a client we have a bit more than 100 head count now in Brazil, when I say, it's a tremendous success because we were able to do this really in a very short period of time in Sao Paolo.
That business.
Business is performing super well for our clients.
But that also we are getting a number of inquiries and finally, because it's also competing the puzzle of Latin America, where we were in Colombia. We are in Colombia are doing really well in Bogota, but.
It's difficult to have a Latin American strategy, unless you cover Portuguese, Brazil, because Brazil is still a huge powerhouse in Latin America, having the combination of Bogota in Sao Paolo.
It makes it really credible and capable so very happy with where this is going very happy also with our operational capability in terms of setting up greenfield sites over the past two years, we've done mostly 100% success in.
We don't field operations, which is a tribute to our operations teams.
And it's super important for our clients to give us more business moving forward.
So.
Please around the.
Our agility.
Now going back to the second question about clients, reducing volume, yes, I cannot give too much details about which clients I'd rather give sector. So you would expect digital advertising has been under pressure for the write off for the wrong reasons I would say the sales in digital marketing a lot less under pressure.
And the more the ocs and the content moderation.
We're under pressure.
And that will continue to be the.
In the case of a little bit Fintech.
As a as also contracted yet we're seeing some rebound but more in the later part of the year. So that's why our guidance is affected as well, but thats, giving us.
Some some hope in 2024 on the Fintech side.
I would say travel and hospitality.
We were expecting I would say a much better.
Q2, Q3 out of travel and hospitality and.
Is it mostly because China didn't show up because Japan is not traveling outside.
That could be different reasons, I think and maybe globally as well.
But it's not.
Delivering the usual.
Power numbers.
We use two.
Nonetheless, our first half on the travel and hospitality is quite spectacular nonetheless.
<unk> is just the second half is not not tremendous so that's what's going on if I. If I can say, we have other sectors like tag gaming.
E Commerce that's flying.
So the opportunities even in the financial services for us.
So it's not all gloom, it's a it's a mix of.
Of the factors that are pretty sick sectorial.
And the other sectors are doing well I hope that answers the question Jonathan.
Yeah.
Great Thanks for that.
This concludes today's Q&A session I will now hand, you over to Jason for closing remarks.
Okay. Thanks, everyone for joining us on this call. If you have any further questions on your any follow ups. Please feel free to get in touch with us on behalf of management.
Oh, Thank you goodbye.
This concludes today's call. Thank you for joining you may now disconnect your lines.
Yeah.
[music].
Yeah.